“Don’t sell your Bitcoin,” Michael Saylor says.
The way he sees it, Bitcoin is digital property. You can now store digital energy on the network forever, like Bitcoin without power failure.
The CEO of MicroStrategy Inc., a listed enterprise software company, believes Bitcoin is the future. He believes that, for example, if Nigeria and Zimbabwe buy $2-3 billion worth of bitcoins, they could end their currency woes. He takes it even further, suggesting they issue bitcoin-backed currencies. He believes Bitcoin can only go up in price.
Therefore, MicroStrategy will continue the strategy it started in August 2020, to buy bitcoin with cash flow, debt or stock. Indeed, MicroStrategy will accumulate bitcoins for years to come, and while the price of the cryptocurrency is volatile, “it will go up forever,” Saylor told CNBC once.
Why does he think it will go up? It has to do with the governmental pursuit of inflationary fiscal policies. During MicroStrategy’s quarterly earnings conference in July 2020, Saylor announced MicroStrategy would explore the possibility of buying bitcoin, gold, or other alternative assets, instead of holding cash. MicroStrategy categorizes Bitcoin as an “intangible asset,” noting that accounting rules require it to report a loss in value when the carrying amount falls below its base value.
Saylor first took the unorthodox move to convert part of its company’s cash reserves into bitcoins, purchasing a whopping 21,454 bitcoins at a price of $250 million. MicroStrategy is the first listed company to invest in Bitcoin, followed by Square and Tesla. MicroStrategy continued to purchase and added 19,452 bitcoins worth US$1.026 billion in February 2021, bringing its total holdings to 90,531 bitcoins.
Saylor is concerned that central banks are supporting the economy with cheap money, for, according to his calculations, an increase in the money supply depreciates the dollar by 15% per year.
With 114,042 bitcoins, MicroStrategy now owns nearly three times as much as any other publicly-traded company. MicroStrategy added nearly 9,000 bitcoins (BTC) to its assets in the third quarter, bringing the total BTC supply to around $ 7 billion. On December 11, 2020, MicroStrategy announced that it had sold $650 million in senior convertible securities, taking out a loan to grow its bitcoin holdings to over $1 billion.
Saylor, who himself holds thousands of bitcoins, sees 2020 as year zero, starting in March, when Tesla announced the purchase of Bitcoin. That was the first year, in terms of legitimate institutional investment.
By December 21, 2020, MicroStrategy announced that its total assets include 70,470 bitcoins, purchased at a price of US$1.125 billion, with an average price of US$15,964 per bitcoin. MicroStrategy determined that Bitcoin is the most powerful treasury asset it can find.
In April 2021, the company purchased another approximately 253 bitcoins with US $15 million in cash, at an average price of approximately US$59,339 per bitcoin.
Saylor spoke with TIME on March 16 for a video chat about his efforts to convince big companies to add Bitcoin to their financial instruments. On February 3-4, 2021, Saylor hosted the Bitcoin for Corporations conference, and, around that time, explained to Deirdre Bossa, host of CNBC TechCheck, how he believes the flagship cryptocurrency will grow forever due to its limited supply, which cannot grow regardless of demand and price.
MicroStrategy proved to be the first public company to actually adopt Bitcoin as a Treasury reserve asset, legitimizing the asset class as an institutional-grade safe haven. Saylor foresees overall a $100 trillion capital flow from real estate investments in the developed world into bitcoin. He’s so bullish, he says, if you raised $100 million to create a new software wallet for bitcoin, take $100 million and buy bitcoin with it.